THE B2B PAYMENTS EXPLAINER: Why business payments have been slow to digitize, and what’s changing that in 2017

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As the existence around us digitizes, payments are no exception. The way we manage money and make payments has roused from physical channels, like cash and checks, to digital methods, in the manner of cards and online platforms. And though that’s been a long-term caftan, it’s one that’s occurred rather seamlessly. 

This isn’t the case for businesses, where the business-to-business (B2B) payments prepare is considerably more complex, and as a result, almost entirely analog for the adulthood of businesses. When businesses pay one another, like transactions between a supplier or a purchaser, the process is cumbersome, involving invoices, waits of 30-to-120-days, multiple banks and tenets, and phone calls. And when those payments happen overseas, plane more friction is involved, like letters of credit.

That reveals payments a top pain point for sellers and buyers alike, because the persisting process is cumbersome, expensive, and often unsafe. And though digital revelations exist, until now, they’ve been too costly and complex to be accessible to the the greater part of merchants, particularly smaller businesses — the population that’s hurt the sundry by the challenges of the existing system. 

However, the tides are beginning to turn, and boundaries preventing firms from digitizing their B2B platforms are slowly starting to abrade. Business payments are finally catching onto consumer payment rages, though it’s still a slow process. As consumer technology becomes numerous available, back-end innovation is becoming simpler, and cheaper, for payments companies. And as consumer-side digital payments adoption rather commences to stagnate as the market saturates, B2B is becoming an increasingly palatable greenfield for firms looking for a new, lucrative market.

A new report from BI Intelligence addresses what’s been witter on about b hold out firms back, why they’re moving forward now, and what they pinch-hit for to gain from making their payments processes digital. It force also discuss potential approaches for moving into the space, and why there’s no “one unreal” B2B payments solution.

Here are some of the key takeaways from the report:

• The business-to-business (B2B) payments buy is a vast opportunity. In the US, B2B payments reached an estimated $18.5 trillion hold out year, vastly outstripping the consumer-to-consumer (C2C) and business-to-consumer (B2C) realms.
• The complexity of B2B payments is hug back innovation, but times are beginning to change. Consumer payments novelty and a vast greenfield opportunity are making the space more accessible and myriad appealing to payments firms, which is translating to broader market availability for commercial travellers.
• But until digitization permeates all stages of the complex B2B payments process, and assigns those disparate segments to work in tandem, we won’t see any major steps for an industry standard

In full, the report:  

• Sizes the B2B payments market conditioned by to other major US payment segments
• Explains how the B2B payments process jobs, and what makes it so complicated relative to consumer payments
• Discusses the ordeal points associated with analog B2B payments
• Analyzes the factors behind deteriorating barriers to industry digitization
• Evaluates what it will take to ultimately build up an industry-wise digital payments standard

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